Manufacturing breaks through

Factory output expanded 2.5 per cent in September, after y-o-y stagnation in the previous two months. What is more encouraging, a generally laggard manufacturing not only matched the overall pace in aggregate IIP, the sector also came out of the rot during July-August.

Capital goods index, a proxy indicator for project investment, too, spurted 11.6 per cent, after decline in the preceding two months. Electricity slowed to 3.9 per cent after a scorching double-digit increase during April-August. Production index of mining, however, recorded the sub-sector’s slowest pace of 0.7 per cent in H1. In mining, coal production expanded 7.2 per cent, though petroleum crude and natural gas remained in the negative zone.

Taking H1 period, aggregate factory output index expanded 2.8 per cent, which though relatively a modest measure, was much better than 0.5 per cent in the same period during 2013-14 or near stagnation in this period two years ago. All the three segments have recorded improvement: mining increased 2.1 per cent (decline of 2.5 per cent); manufacturing was up 2 per cent (0.2 per cent), and electricity, gas and steam 10.4 per cent (5.9 per cent).

Capital goods
In use-based classification, capital goods index gushed 11.6 per cent in September. However, held down by decline in July-August, the sector recorded a lower 5.8 per cent expansion over H1, which was nevertheless better than declines in H1 of preceding two fiscals. Among the other material inputs in project execution, cement production increased 9.7 per cent and alloy, non-alloy steel 2 .3 per cent cumulatively. Consumer durables index has kept sinking, consumer durables include passenger cars, two-wheelers, gems and jewellery etc.